Does Renters Insurance Cover Theft?

Renters insurance covers theft of most of your personal belongings whether they’re inside or outside of your home, including some instances while you’re traveling or just parked your vehicle at the local grocery store, by reimbursing you for their cost or value.

But some restrictions do apply to theft under your renters insurance policy. For instance, if the theft was deemed to be a covered peril by your insurer, they will reimburse you for your stolen belongings and it will be up to you to purchase similar items.

Your policy’s reimbursement method comes under your personal property coverage, which is designed to cover belongings like electronics, clothes and even furniture if they’re stolen, vandalized or just damaged.

Your policy’s personal property coverage comes in two forms: replacement cost or actual cash value. Replacement cost simply reimburses you the exact dollar amount you paid for the stolen item, while actual cash value reimburses you for your insurer’s perceived value of the item at the time it was stolen.

Actual cash value takes depreciation into account, so you’ll almost always receive less compensation for your stolen items under actual cash value coverage. It’s tough to determine how much you’ll receive since every insurance company has a different way of calculating perceived value. But if your laptop was stolen and you bought it for $1,000 three years ago, you may only receive $700 — given it has a 10-year shelf life.

On the other hand, replacement cost coverage will pay you $1,000 for that same stolen laptop — no matter how long ago you bought it (given it still works and you still used it). Since replacement cost coverage always pays more, it’s also the more expensive coverage of the two.

If your belongings are stolen, you must file a claim with your insurer and then pay your policy’s deductible for your coverage to kick in. If your deductible is $250 and the payout is $700, that means you’d only get reimbursed $450 because your deductible is subtracted from the payout.

But enough with the laptop talk, let’s take a deeper dive into common theft situations to see how your renters policy protects you from theft.

Renters insurance extends coverage to your belongings when they’re stolen outside of your home. So if your laptop is stolen at the local coffee shop or your phone gets swiped at the gym, your renters insurance policy should reimburse you to replace those items. However, your coverage limit is likely only 10% of your policy’s maximum.

The coverage limitations exist because you’re not expected to carry around all your possessions while you’re outside the home. For instance, you may have a bag of clothes stolen at the gym, but you likely don’t have all your clothes in that bag, which minimizes the cost.

So if you’ve got $30,000 worth of personal property coverage on your policy, you’d likely have $3,000 worth of coverage for theft outside your home. So if you always carry around your laptop and phone, and they’re worth a combined $4,000, you may want to increase your coverage just in case they are stolen.

This coverage can also apply to belongings you keep in a storage unit. However, you should always check your policy to figure out how much coverage your individual insurer provides you for stolen items outside your home and in storage units.

Renters insurance covers theft of your bicycle whether it was stolen out of your garage or from the bike rack at the grocery store. However, most renters policies have limitations on how much you’ll get paid for expensive items. Even though you may have $30,000 in personal property coverage, you may only have up to $2,500 in coverage for your bicycle.

However, you should check with your insurance agent to find out your coverage amounts for expensive items. While many insurers max out expensive items at $2,500 per item, common coverage limits are also $500 and $1,500 per item. But you may be able to add an endorsement or rider (no pun intended) to your policy, which provides you with more coverage on an item-by-item basis.

So if you’ve got an expensive mountain, road or BMX bike, you’ll want to check your policy to make sure your bike is fully covered, should it get stolen or damaged by a covered peril.

Yes, most renters insurance policies cover theft of cash, whether it was stolen from your home or away from it. But, because it’s very tough to prove the amount of cash that was actually stolen, your policy typically only covers up to $200 in cash per claim.

If something was stolen out of your vehicle, whether it was parked in your garage, on the street outside your house or 20 miles away while you were in the grocery store, renters insurance will cover theft from your car. Coverage limits of 10% of your policy’s total personal property coverage likely apply, though. So someone with $30,000 in personal property coverage will only have $3,000 in coverage for items stolen from their car.

Whether you’re in the next state over or halfway around the country, renters insurance covers theft of your belongings when you’re traveling. Coverage limits mimics are the same as when your belongings are stolen outside your home, so your maximum payout is likely only 10% of your policy’s maximum.

In that instance, $30,000 worth of personal property coverage would garner you $3,000 worth of personal property coverage while you’re traveling. It’s important to note that many insurers limit coverage to travel within the United States or North America, and your policy likely doesn’t cover your belongings outside the country.

Roommate theft is tricky because you both live under the same roof. Your renters insurance may cover theft by your roommate only if they’re not on your policy, a police report for the theft is filed and you press charges. However, if you share a policy, which is never a good idea, you wouldn’t be covered.

The reason a police is needed to file a claim is that you must prove to your insurer that a crime actually took place, and the theft wasn’t just a long-term borrowing situation that would be classified as a civil matter.

However, some insurance companies won’t cover roommate theft under any circumstance, so you’ll want to check with your insurance agent to see if you’re covered.

With Clovered, getting a renters insurance policy that covers theft is easy. We partner with the top insurers in the country, so each of our policy offerings include some form of theft coverage. All you need to do is answer a few details about your home and living situation in our online quoting tool, we’ll run some risk data in the background, and then we’ll provide you with a policy that fits your needs.

It only takes a few minutes to get a policy and, at an average of $10 to $15 per month, it’s the cheapest form of home insurance on the market.